Pre-Market Engagement

INTRODUCTION

Pre-market engagement is a procurement technique that enables buyers to engage and consult with potential bidders before a procurement opportunity goes to market. The purpose is to inform the specification of requirements, help identify the best procurement approach, and to attract the right level and type of supplier participation. It is particularly useful if there is a need to create a market or increase supplier participation because of a lack of market interest, especially where there is an incumbent supplier, or if the requirement is new or warrants innovation. This engagement can continue until bidding documents are issued. Once bidding documents are issued any subsequent engagement is part of the procurement bidding process.[1]

The role of pre-market engagement at the start of the procurement cycle is shown in the diagram below. Time spent on pre-market engagement has a positive impact on the effectiveness of the procurement and delivery stages.

BENEFITS

The benefits of pre-market engagement include:[2] 

• Stimulating competition which can reduce the dependency on a small number of suppliers;
• Providing procuring organisations with information and insights which can be used to develop an informed and forward-looking sourcing strategy.
• Avoiding specifications being based on or strongly influenced by the products and services provided by incumbents, thus mitigating any incumbency advantage;
• Managing market expectations. By engaging with suppliers and setting out procurement pipelines and the capabilities needed to deliver them, suppliers can be prepared for upcoming tenders, and officials can be better assured that those companies asked to provide products and services can meet the stated needs;
• Strengthening the relationship between industry and procuring authorities and providing the opportunity for smaller or new market players who may be responsible for placing new technology on the market to compete;
• Providing an opportunity for the health authority to sense-check its requirements, the feasibility of the requirements, the timescales in which they can be achieved and the capacity of the market to deliver.
• Allowing the market to raise questions or challenge procurement approaches, thus minimising the risk of any legal challenges once the tender has commenced;
• Avoiding the need for long and complex procurement procedures which may be chosen where procurement or clinical teams are unsure as to the products available in the market;
• Allowing the formulation of appropriate, realistic and tailored requirements;
• Identifying and evaluating risks early and designing risk management strategies.

METHODS

Methods of conducting pre-procurement engagement include: 

• Undertaking research using internal/external experts or trade associations and professional bodies.
• Using structured market or supplier days to test out thinking on requirements and outcomes prior to commencing the formal procurement process.
• Market sounding approaches: using questionnaires or interviews to gather information in the market or issuing consultation documents about specific opportunities, for instance by using a market sounding prospectus.
• Communicating, either through formal means such as EU Prior Information Notices (PIN) or equivalent means, such as press releases, websites or industry meetings to outline upcoming needs and tenders to the wider market;
• Issuing an open invite to industry to come forward with new technology and innovations.

PUBLIC PROCUREMENT CONSIDERATIONS

Procurement legal regimes generally allow pre-market engagement as a means of encouraging competition and achieving value for money. However, the activity must conform to the public sector procurement principles of transparency, fairness, non-discrimination, proportionality, and integrity. It should not have the effect of distorting competition. The following actions will ensure that pre-market engagement conforms to these principles: 

• Where the conclusions of a pre-market engagement exercise could exert a material influence on future tenders, and above all where a potential bidder has been closely involved with any consultative process used to inform the specifications, then those conclusions must be shared with the whole sector.
• No supplier should be given an advantage, in the form of additional information, over another.
• Ensure that all suppliers are aware that any resulting procurement will be conducted competitively.
• Ensure that a proportionate number of suppliers are consulted which are commensurate with the market size. It is not essential to speak to every supplier but a suitably broad cross-section of suppliers, including SMEs, will provide valuable input.
• Resulting specifications or requirements should not be designed in favour of any one potential supplier.
• All information disclosed by a supplier should be treated confidentially and not disclosed to other suppliers.

CASE EXAMPLE

An example PIN is shown in the box below which forms part of a pre-market engagement process for sourcing healthcare waste services.[3]

It can be seen that the PIN:

• Provides an outline requirement;
• Defines the scope of the service;
• Determines strategic, regulatory and legislative parameters;
• Establishes a formal transparent process with timelines;
• Offers secure communication with suppliers to protect confidentiality;
• Offers a choice of engagement methods to suit different suppliers;
• Confirms that a competitive tendering exercise will follow;
• Reassures suppliers that they will not be disadvantaged if they do not participate in pre-market engagement activities.

In this way, it can be said that the client is conducting its pre-market engagement exercise fully in compliance with public procurement best practice and principles.

[1] : http://pubdocs.worldbank.org/en/258511553620191211/Procurement-Guidance-MDI-Equipment-Buyers

[2] https://www.healthtechireland.ie/wp-content/uploads/2020/08/Procurement-FINAL-1

[3] https://bidstats.uk/tenders/2021/W19/750715126